Former Cumberland Man Sentenced to 10 Years for Bank Fraud and Tax Evasion
|U.S. Attorney’s Office June 26, 2014|
PORTLAND, ME—United States Attorney Thomas E. Delahanty II announced that Walter Scott Fox, 56, formerly of Cumberland, Maine, and now of Canton, Georgia, was sentenced in U.S. District Court by Judge D. Brock Hornby to 10 years in prison and three years of supervised release for bank fraud and tax evasion. He was also ordered to pay over $9,500,000 in restitution. At the conclusion of the sentencing, he was remanded into the custody of the United States Marshals Service. Fox pleaded guilty on February 4, 2014.
According to court documents, from 1995 until 2011, Fox used his position as a loan officer at Casco Northern Bank and at its successor, KeyBank, to originate or authorize over $14,000,000 in fraudulent loans and lines of credit using the identities of four real individuals, without their knowledge or consent. He used over $5,800,000 of the fraudulent proceeds to keep the loans current and prevent the detection of his scheme. He used almost $8,200,000 for personal expenses including to pay for his children’s educations and family vacations, and to support his business, “The Boathouse.” Fox failed to report receiving any of this income to the Internal Revenue Service (“IRS”) causing a tax loss of over $1,300,000 between 2006 and 2011.
The scheme was discovered in 2012 when KeyBank denied an increase for one of the credit lines because it did not fit the model for its community development loans. With no funds available to make payments and keep the scheme afloat, all the fraudulent loans became delinquent by August, 2012. Fox abruptly resigned his position at KeyBank on September 7, 2012 when a supervisor became concerned about the delinquent loans and made inquiries about the status of his loan portfolio.
Judge Hornby observed that the sentence was needed to send a message, promote respect for the law and provide just punishment because Fox used the proceeds of his fraud to fund a lifestyle that most people cannot afford.
The case was investigated by the Federal Bureau of Investigation and IRS—Criminal Investigations.